Moody's rates Newport

Moody's Investors Service said it assigned a B2 corporate family rating and a B2 probability of default rating to Newport Television Holdings LLC and a Caa1 rating to its $100 million 10-year senior discount notes.

In addition, Moody's said it assigned a Ba3 rating to Newport Television LLC's $590 million senior secured credit facility ($75 million revolver due 2016 and $515 million term loan due 2016) and a Caa1 rating to its $200 million 9-year senior PIK toggle notes.

The outlook is stable.

The agency said that Newport used the proceeds of the senior secured term loan, a $200 million opco senior interim loan, which is to be refinanced with the PIK toggle notes, and a $100 million holdco senior interim loan along with $259 million of cash equity from the equity sponsor, Providence Equity Partners Inc., to acquire Clear Channel Communications, Inc.'s television station group.

Newport's B2 rating reflects the company's significant debt to EBITDA leverage of 10.4x, modest free cash flow relative to debt, weak operating margins relative to its broadcast peer group and execution risk associated with improving the operating performance and completing the sale of certain identified assets, the agency said.

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